Tuesday, December 31, 2019

3d Circuit gets descriptiveness right: it's a matter of both the term and the goods/services

Engage Healthcare Communications, L.L.C. v. Intellisphere, L.L.C., --- Fed.Appx. ----, 2019 WL 6170825, No. 19-1017 (3d Cir. Nov. 20, 2019)

Panels in the Second and Ninth Circuits, which really ought to know better, have occasionally reasoned that a term is not descriptive unless you can figure out what the goods/services are just by looking at the term.  This is nonsense, and it’s nice to have an appellate opinion, even unpublished, saying so outright. The proper inquiry, as the PTO has long insisted, is whether, knowing the term and the goods/services, some leap is required to figure out their relation; when the relation is obvious, the term is at best descriptive.

Anyhow, this is a trademark case between “strikingly similar” companies owned by two brothers. The court of appeals affirmed a finding of noninfringement, though on slightly different grounds with respect to the most interesting term, PEER-SPECTIVES.

Here are the marks at issue

With the exception of PEER-SPECTIVES, they are all descriptive without any need for further discussion, both asserted as service marks (for advertising) and for the underlying publications etc. The court of appeals agreed that “advertising service marks must be sufficiently separate from the subject of the advertising, and must be used to identify advertising services, not merely to identify the subject of the advertising, and “an advertising service mark that merely describes the subject of its advertising is a descriptive mark not entitled to service mark protection.” Indeed, the assertion of the same marks as trademarks for the underlying industry could be regarded as an admission of descriptiveness.

There was not enough evidence to show that the alleged marks had achieved secondary meaning either for advertising or for the underlying goods, which were online/print publications in the fields of hematology and oncology. Plaintiffs argued that the district court erred in finding the marks had not achieved secondary meaning at the time of defendants’ alleged infringement, because there was no definitive date in the record when the alleged infringement began.  But here “the operative issue is not when defendants infringed its marks, but whether the alleged marks had achieved secondary meaning at all, whether it be on the date of infringement, the date of summary judgment, or even today.” There was not sufficient evidence that they had done so. Courts use multiple factors to establish secondary meaning. Here, plaintiffs could offer evidence only on six of the Third Circuit’s eleven factors: “(1) the extent of sale and advertising utilizing Engage’s trademarks; (2) length of use of Engage’s trademarks; (3) exclusivity of use of Engage’s trademarks; (4) copying of Engage’s trademarks by Intellisphere; (5) the number and amount of sale involving Engage’s trademarks; and (6) the number of consumers privy to Engage’s trademarks through the use of those marks in commerce.”

Vitally, there was no evidence of consumer perception. Given that void, the alleged extensive use and alleged copying by the defendants “do not alleviate their burden of showing how consumers identify these marks as being synonymous with the origin of their products, nor is the circumstantial evidence presented so overwhelming as to imply consumer association.” It has to matter that the plaintiffs were asserting such a smorgasbord of marks—if there’d been just one, maybe it would have been more plausible that lots of advertising had worked, but it’s just not convincing that all those descriptive terms served as marks for plaintiffs, and thus it’s not convincing that any given one out of the plethora stood out. But the degree of descriptiveness also played a big role: By way of comparison, the court believed that “at least some producer can readily make a strong showing on the six factors plaintiffs identified, through its sale of ‘Belgian chocolates,’ but surely that producer would not be entitled to trademark protection for that label no matter how long or pervasive its use of that label; consumers will never be in danger of associating that label with the producer.”

The court treated Peer-Spectives differently because the district court deemed it suggestive. The court of appeals disagreed, making several important and persuasive points: The district court had reasoned that “a ‘mental leap’ is required to tie PEER-SPECTIVES to online and in-person continuing medical education classes for physicians. Absent this explanation, any link between the words and the healthcare industry would not have been immediately apparent, a clear indication that the mark is [ ] suggestive.” 

It’s true that the line can be difficult to draw, but fortunately the Canfield Third Circuit case resolved the issue: “chocolate fudge” was descriptive for soda, and that’s the same kind of term that Peer-Spectives is. “It would be readily apparent to the average consumer that ‘Peer-Spectives’ stands for ‘Peer Perspectives.’ Indeed, defendants’ use of the phrase ‘Peers & Perspectives’ is the very phrase plaintiffs assert infringed on their alleged mark.” This is a vitally important point about validity’s interaction with scope! Deeming too many terms suggestive eases monopolization of terms that convey useful information to consumers, without proof that there is a corresponding benefit to consumers in the form of protecting them from confusion. As the court explained, “[p]eer perspective is a concept that most consumers immediately would recognize as a generally descriptive term that can be used to describe many products and applicable across a multitude of industries and markets, as is the term ‘chocolate fudge.’” “Chocolate fudge” standing alone doesn’t create an immediate association with diet soda, but that isn’t the test.  It takes no “mental leap” for consumers to recognize its relevance for diet sodas, once they see it applied thereto.

A descriptive term need not be “tied to any particular industry or market.” If we didn’t use that rule, “ ‘very creamy ice cream’ would be found to be clearly descriptive, but ‘very creamy,’ because its link to ice cream would not be immediately apparent, could nevertheless be trademarked by an ice cream maker. Of course, it is reasonable to believe that such ice cream maker would then attempt to enforce its trademark against every other ice cream maker who uses the term ‘very creamy ice cream’ on its products, the very term that was deemed clearly descriptive in the first place.”

Likewise, extensive use of a generally applicable term in other markets supported descriptiveness. “[I]ndeed, if the ‘mental leap’ required can be made in many markets, perhaps it is not much of a leap at all…. Unsurprisingly, a Google search of the term ‘peerspective’ returned over 12,000 results, with a slew of examples of its use across many industries.”

There was no better evidence of secondary meaning here than for any other term at issue. Thus, the district court was affirmed not because the defendants didn’t infringe, but because there was no enforceable mark.

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